Assets 2020 2019 Accounts receivable 30,000 14,000 Inventory 27,000 20,000 Equipment 60,000 78,000 Accumulated depreciationequipment (29,000) (24,000) Total $126,000 $108,000 Liabilities and Stockholders' Equity Accounts
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Prepare a statement of cash flowsindirect method, and compute free cash flow.
Nosker Company Comparative Balance Sheets December 31
Assets
2020
2019
Cash
$ 38,000
$ 20,000
Accounts receivable
30,000
14,000
Inventory
27,000
20,000
Equipment
60,000
78,000
Accumulated depreciationequipment
(29,000)
(24,000)
Total
$126,000
$108,000
Liabilities and Stockholders' Equity
Accounts payable
$ 24,000
$ 15,000
Income taxes payable
7,000
8,000
Bonds payable
27,000
33,000
Common stock
18,000
14,000
Retained earnings
50,000
38,000
Total
$126,000
$108,000
Nosker Company Income Statement For the Year Ended December 31, 2020
Sales revenue
$242,000
Cost of goods sold
175,000
Gross profit
67,000
Operating expenses
24,000
Income from operations
43,000
Interest expense
3,000
Income before income taxes
40,000
Income tax expense
8,000
Net income
$ 32,000
Additional data:
Dividends declared and paid were $20,000.
During the year, equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
All depreciation expense, $14,500, is in the operating expenses.
All sales and purchases are on account.
Instructions
a.Prepare a statement of cash flows using the indirect method.
a. Cash from operating activities $31,500
b.Compute free cash flow.
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Authors: Jonathan E. Turner
1st Edition
0470874759, 978-0470874752
